ITC and HUL see rural demand recovery in festive season

Rohit Jawa, CEO and Managing Director of HUL, added that they need to be watchful of volatile global commodity prices as well as the impact of monsoon on crop output and reservoir levels.
Image used for representational purpose only.
Image used for representational purpose only.

NEW DELHI: Among the three leading FMCG companies in India, ITC and Nestle, reported robust sales and profit figures for the quarter ending September 2023 (Q2FY24) while Hindustan Unilever Ltd (HUL) saw a slight drop in its quarterly profit. 

ITC and HUL highlighted that they continue to see a slowdown in rural demand, mainly caused by high inflation, but expect a recovery in the festive season.

“We delivered resilient and competitive growth whilst stepping up our EBITDA margin in a challenging operating environment, marked by subdued rural demand and heightened competitive intensity. Looking forward we remain cautiously optimistic,” said Rohit Jawa, CEO and Managing Director of HUL.

Jawa believes that FMCG demand may continue a gradual recovery with tailwinds from the upcoming festive season, sustained buoyancy of services and the Government’s thrust on capex.

However, he added that at the same time, they need to be watchful of volatile global commodity prices as well as the impact of monsoon on crop output and reservoir levels.

ITC in its quarterly result said that consumption demand has been relatively subdued, especially in the value segment and rural markets on the back of sub-par monsoons and persistent food inflation which saw a sharp spike during the quarter. 

The consolidated net profit of HUL, which owns brands such as Lakme, Ponds and Vaseline, in Q2FY24, saw a fall of 0.48% to Rs 2,657 crore, compared to Rs 2,670 crore in Q2FY23.

Its total income for Q2FY24 came in at Rs 15,806 crore as against Rs 15,253 crore YoY.

Hotels-to-FMCG conglomerate ITC reported a standalone net profit of Rs 4,927 crore in Q2FY24, a growth of 10.32% from the year-ago period.

Its revenue from operations grew 2.6% higher to Rs 16,550 crore. 

Nestle India reported a 37.28% year-on-year surge in net profits at Rs 908 crore in Q2FY24 on the back of the consistent performance of all major brands. Net sales of the Maggi, KitKat and Nescafe maker crossed the Rs 5,000 mark in a quarter for the first time. 

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